Page 96 - 1-Entrepreneurship and Local Economic Development by Norman Walzer (z-lib.org)

The Drivers of Regional Entrepreneurship in Rural and Metro Areas 85

Figure 5.2. Entrepreneurial Breadth, 2001

neurial breadth, with proprietors accounting for 17.6 percent of nonfarm
5
employment and a LQ of 1.101. In contrast, metropolitan proprietors
made up only 15.4 percent of nonfarm employment, leading to a below-
average metro LQ of 0.96.
Rural places may have high levels of entrepreneurial breadth for various
reasons. First, the small size of rural economies naturally leads to smaller
firms serving smaller populations. In 2002, the average employment in ru-
ral establishments was 12.0 people compared to 16.2 people in metro es-
tablishments. A smaller firm size implies a higher ratio of owners to work-
6
ers and, thus, higher entrepreneurial breadth.
Second, the industry structure of rural economies also results in higher
breadth levels. Rural (nonmetropolitan) self-employment is more concen-
trated in construction and retail trade industries (figure 5.3). Retail firms
tend to be smaller than firms in other industries, reinforcing the impacts as-
sociated with smaller firm size. In the construction industry, persons may be
considered independent contractors instead of employees. Consequently,
they would be identified as proprietors instead of wage earners.

Entrepreneurial Depth

Some regions may have more entrepreneurs, but how much income and
value do they create? High concentrations of entrepreneurship enhance the